Effects Of Housing Transfer Taxes On Household Mobility
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Author | : Essi Eerola |
Publisher | : |
Total Pages | : |
Release | : 2019 |
Genre | : |
ISBN | : |
Download Effects of Housing Transfer Taxes on Household Mobility Book in PDF, Epub and Kindle
Housing transfer taxes are fiscally important in many countries despite evidence of substantial welfare losses found in several quasi-experimental studies. Research designs used in this prior literature are prone to attenuation bias due to spillovers from mobility or trading across control and treatment groups. We account for these spillovers by combining quasi-experimental empirical analysis with a one-sided housing market model where households act as both buyers and sellers. Using a Finnish tax reform and total population register data, we find that an increase in the transfer tax has a significant negative effect on household mobility. We calibrate our theoretical model to match the mobility rates in our data and our quasi-experimental estimate. In our setting, relying only on the quasi-experiment and ignoring the spillovers would lead to a 20% underestimation of the effect. We argue that the welfare costs of transfer taxes are larger than previously thought.
Author | : Christian A. L. Hilber |
Publisher | : |
Total Pages | : 43 |
Release | : 2013 |
Genre | : |
ISBN | : |
Download Housing Transfer Taxes and Household Mobility Book in PDF, Epub and Kindle
We estimate the effect of the UK Stamp Duty Land Tax on household mobility using micro data. Exploiting a discontinuity in the tax schedule as a quasi-experimental setting, we isolate the impact of the stamp duty from other determinants of mobility. We compare homeowners with self-assessed house values on either sides of a cut-off value where the tax rate increases from 1 to 3 percent and find that a higher stamp duty strongly negatively affects their propensity to move. The 2 percentage-point increase in the stamp duty reduces the annual rate of mobility by between 2 and 3 percentage-points or about 30 percent. This adverse effect is confined to short-distance and non-job related moves, suggesting a distortion in the housing rather than the labour market. As a cross-validation check, we also analyse the distribution of actual transaction prices and find that the tax rate increase reduces the volume of sales by roughly 30 percent.
Author | : Benjamin Dachis |
Publisher | : |
Total Pages | : 21 |
Release | : 2012 |
Genre | : Housing |
ISBN | : 9780888068842 |
Download Stuck in Place Book in PDF, Epub and Kindle
Municipalities across the country should beware the example of Toronto, where the imposition of a land transfer tax depressed housing sales by 16 percent, raised relocation costs and reduced household mobility.
Author | : Fernando Vendramel Ferreira |
Publisher | : |
Total Pages | : 60 |
Release | : 2004 |
Genre | : House buying |
ISBN | : |
Download You Can Take it with You Book in PDF, Epub and Kindle
Author | : Daniel Jonas Schmidt |
Publisher | : |
Total Pages | : 0 |
Release | : 2022 |
Genre | : |
ISBN | : |
Download Property Transfer Taxes, Residential Mobility, and Welfare Book in PDF, Epub and Kindle
In this paper, I develop an overlapping generations model to analyze the effects of property transfer taxes on homeownership, residential mobility, and welfare in the Netherlands. A revenue-neutral abolition of the 2% transfer tax increases the likelihood that homeowners sell their old house and buy a new one by about 40%. It also leads to a rise of the homeownership rate by 1-5 percentage points (depending on how revenue neutrality is achieved). Newborns prefer to live in an economy without property transfer taxes if the forgone tax revenues are replaced with higher annual property taxes, but not if revenue neutrality is achieved with higher income taxes. I also consider a partial reform that only exempts young first-time homebuyers from the transfer tax and is financed with higher annual property taxes. The resulting welfare gains are approximately one half of the welfare gains from the complete reform.
Author | : Byron Lutz |
Publisher | : DIANE Publishing |
Total Pages | : 51 |
Release | : 2011-05 |
Genre | : Business & Economics |
ISBN | : 1437940021 |
Download Housing Crisis and State and Local Government Tax Revenue Book in PDF, Epub and Kindle
State and local government tax revenues dropped steeply following the most severe housing market contraction since the Great Depression. The authors identify five main channels through which the housing market affects state and local tax revenues: property tax revenues, transfer tax revenues, sales tax revenues, and personal income tax revenues. They find that property tax revenues do not tend to decrease following house price declines. The other four channels have had a relatively modest effect on state tax revenues. These channels jointly reduced tax revenues by $15 billion from 2005 to 2009, which is about 2% of total state own-source revenues in 2005. Charts and tables. This is a print on demand publication.
Author | : OECD |
Publisher | : OECD Publishing |
Total Pages | : 143 |
Release | : 2022-07-21 |
Genre | : |
ISBN | : 9264862684 |
Download OECD Tax Policy Studies Housing Taxation in OECD Countries Book in PDF, Epub and Kindle
Housing Taxation in OECD Countries provides a comparative assessment of housing tax policies in OECD countries and identifies options for reform. The study starts with an overview of recent housing market trends and challenges and an analysis of the distribution of housing assets.
Author | : Joel B. Slemrod |
Publisher | : |
Total Pages | : 65 |
Release | : 2016 |
Genre | : |
ISBN | : |
Download The Behavioral Response to Housing Transfer Taxes Book in PDF, Epub and Kindle
This paper estimates the behavioral response to residential real estate transfer taxes by studying notched tax rate changes in Washington D.C., exploiting both a price and time notch as identifying variation. We provide evidence that there is manipulation of the sales price to the lower-tax-rate region around the price notch, and use this manipulation to show that there was significant awareness of the tax changes and the incentives they created. We find some less compelling evidence of a change in the timing of house sales to beat the tax increase. Finally, we construct difference-in-difference estimates to examine whether there is a lock-in effect in the volume of house sales away from the price and time notches; we find no evidence of a lock-in effect in this setting.
Author | : Fernando V. Ferreira |
Publisher | : |
Total Pages | : 0 |
Release | : 2012 |
Genre | : |
ISBN | : |
Download You Can Take it with You Book in PDF, Epub and Kindle
In 1978, Californians approved Proposition 13, which fixed property tax rates at 1% of housing prices at the time of purchase. Beyond its fiscal consequences, Proposition 13 created a lock-in effect on housing choice because of the implicit tax break enjoyed by homeowners living in the same house for a long time. In this paper, I provide estimates of this lock-in effect, using a natural experiment created by two subsequent amendments to Proposition 13 - Propositions 60 and 90. These amendments allow households headed by an individual over the age of 55 to transfer the implicit tax benefit to a new home. I show that mobility rates of 55-year old homeowners are approximately 25% higher than those of 54-year olds. The second contribution of this paper is the incorporation of transaction costs, due to Proposition 13, into a household location decision model, providing a new way to estimate marginal willingness to pay (MWTP) for housing characteristics. The key insight of this model is that because of the property tax laws, different potential buyers have different user costs for the same house. The exogenous property tax component of this user cost then works as an instrument to solve the main identification problem of revealed preference models - the correlation between price and unobserved quality of the product.
Author | : Orsetta Causa |
Publisher | : |
Total Pages | : |
Release | : 2020 |
Genre | : |
ISBN | : |
Download Should I Stay Or Should I Go? Book in PDF, Epub and Kindle